1.50% Yield on the 10-Year Treasury? These Guys Called It First

First, the bad news: the U.S. and global economies are so weak, and the outlook for Europe’s crisis so bleak, that investors have been piling into the perceived safety of U.S. Treasurys, driving the yield on the benchmark 10-year note to new record lows under 1.60%.

The good news? Well, it’s good news only if you’re one of the few who called it. They do actually exist: Steven Ricchiuto of Mizuho Securities USA, Dan Greenhaus of BTIG and the team over at London-based Capital Economics all were there first. (There may well be others, in which case feel free to step forward in the comments section and claim your prizes.)

Perhaps with the benefit of hindsight, calling for rates to fall this low was a no-brainer. Did anyone really think the global economy was going to take off again? Did anyone really think the eurocrats had patched everything up for good on the Continent? These foresighted folks were early passengers on the gloom train, and are taking their richly deserved victory laps today.

At the end of last year, Ricchiuto points out in a note to clients today, he predicted the 10-year yield was more likely to hit 1.50% before it hit 2.50%. His view, he says, “was based on the view that the situation in Europe would steadily deteriorate,” pushing investors into the dollar and Treasurys.

Ricchiuto does acknowledge some changes of heart along the way. “I changed my call” after the ECB announced its liquidity program late last year, and then again “began to morph my bond call back towards lower rates” after Greece and Spain started to head downhill again, he writes.